Schools in Kenya's capital Nairobi and the coastal town of Mombasa have been shut indefinitely as three days of nationwide cost-of-living protests kicked off on Wednesday.
Last week's violent protests resulted in the deaths of at least 14 people.
"The government has received credible security intelligence that criminal elements planning to unleash terror and violence on the public [on Wednesday] intend to engage in armed skirmishes with security agencies around certain schools within Nairobi and Mombasa counties," the interior ministry said.
Police chief Japheth Koome has declared the anti-tax hike protests illegal, even though the high court had on Monday rejected a request to declare them illegal.
During similar protests last Wednesday, the police shot at least 10 people.
More than 50 schoolchildren were also teargassed while in their classroom in Nairobi and were subsequently rushed to the hospital in an unconscious state.
There have been reports of police firing teargas canisters at protesters in neighbourhoods around Nairobi.
Protesters armed with crude weapons have also barricaded roads in western Kenya and extorted money from road users.
Human rights organisations have strongly criticised the police for what they call their excessive use of force.
Local and international groups and foreign diplomats have expressed deep concerns over the situation in Kenya, urging dialogue to address the issues at hand.